Transistor radios were not the only Sony line catching on. Various products were doing well in the company's original field of audio equipment.One of these was Japan's first condenser microphone, the C-37, which would eventually stand out as a leading example of world-class Japanese technology.

Ever since he began working on stereo recording microphones, Nakatsuru had promised himself that one day he would make a condenser microphone himself.

In those days, condenser microphones were exclusively foreign-made, and audio experts (such as filmmakers and NHK's sound engineers) swore by foreign brands and would not look at any local product. This was understandable, for Japan has very hot and humid summers, and the accepted verdict was that no condenser microphone made under these conditions would function properly. It would give out nothing but noise and be utterly useless.

Nakatsuru exclaimed,"This is nonsense. If no one else will make a local product that works, then it is up to Sony." Knowing he faced a tough task, he went to work.

The immediate impetus came from Heitaro Nakajima of the NHK Science and Technical Research Laboratories. At the time, Nakajima's laboratory was also working on a prototype. This, the very first condenser microphone built in Japan, had a celluloid diaphragm silver-plated on one side. Unfortunately, however, it was prone to emitting noise and when the voltage was too high the celluloid would burst into flames. Thus the project was discontinued.

Nakatsuru learned from Nakajima and by studying German microphones.Though less spectacular than US models, the German ones generally gave the impression of being solidly built, something that appealed to Nakatsuru.

The first problem was the diaphragm. Nakatsuru tried all kinds of materials without success. Then a DuPont product, a polyester material called "Mylar," was imported. He thought this looked feasible, but he had no idea how he was going to apply the pole plate to the Mylar. He finally hit upon the idea of applying gold, but could not see how it could be done. It was Ibuka who put him on the right track. He had an acquaintance who had developed the sputtering technique. Nakatsuru made repeated trials,converting the gold to a form of vapor and depositing or "sputtering" this onto metal, until he was convinced it would work. The first problem was solved and he now had his diaphragm (film).

Next, how was Nakatsuru going to incorporate this into the audio equipment? These were structural questions and involved problems in mass production. The microphones required a vacuum tube of a special type. The Germans used a small triode made by Telefunken, the AC-107 costing 7,000 yen apiece. Using them would price the microphone out of the market. There was nothin to do but look for a very ordinary tube. The one he chose from the many tubes available was a pentode called 6A-U6, which he tried using as a triode connected to a plate and grid. It worked. Now at last he had a prototype C-37.

Nakatsuru marveled at the way breakthroughs came when he persevered --- as well as how far he had progressed.
There was one last obstacle: structural decisions involving the capsule design. In those days, one did not plan to stamp out the form on a press. The envelope would have to be virtually handmade by soldering mesh over the front and fitting the two halves together. Somehow or other, it began to take shape.

When shown the finished prototype, Ibuka's contented response was "We have to advertise. Let's print the name Sony across the middle." The microphone was subsequently used widely by both NHK and commercial stations, and as its debut coincided with that of TV, it played a considerable role in advertising Sony, just as Ibuka had hoped.

The process used to successfully produce an audio tape recorder could surely be applied to a video tape recorder. surely, any electronics maker would have come to the same conclusion. Sony, which prided itself as the pioneer of magnetic recording, resolved to take up this challenge.

Already the BBC, RCA, Ampex and Bing Crosby, among others, had begun to develop VTRs. The machines developed by these firms, however, were large monsters.

Unlike audio tape, VTR tape was wound at speeds of 4-5 m/sec. or faster, and the diameter of the tape reel increased rapidly during winding. Not only did it take time for the tape to reach the proper speed once it was turned on, but once it started running, inertial force made it difficult to stop the machine without ripping the tape. After looking over the American models, Ibuka gave the 20,000 rpm, four-head machines little chance of seeing practical use.

The 1957 announcement by Ampex that it had developed the world's first commercial VTR took Ibuka and Sony staff by surprise. The product Sony predicted would never make it was actually being marketed. In fact, by May of the following year, NHK and major private Japanese television corporations began to use the machine.

" If Ampex can do it, there's no reason why Sony can't," said Ibuka, raising the battle cry. Ibuka decided that the immediate task before them was first to catch up with and then surpass Ampex's technology. Then they would have to develop their own product and produce a smaller, lighter VTR.

The Ampex commercial VTR was a striking achievement, but was not without drawbacks. The large, cumbersome machine employed two-inch tape and an oversized drum. Replacing the head, which frequently wore down, cost tens of thousands of yen. The 30 million yen price tag, too, was unbelievable at the time.

Kihara's first impression upon looking at the image produced by the Ampex model with its plethora of vacuum tubes was, "What a monstrosity!" At the time, Kihara and his staff were already designing their own VTR. Their only reference until then, however, had been a copy of the circuit diagrams. With these precious diagrams they intended to decipher the Ampex VTR. These diagrams were not very clear nor helpful, however. While praying that a more accurate form of information would come their way, Kihara and his staff had continued to race against time to produce their own design.

They understood the movement and the underlying principles involved. And they had the circuit diagrams, dubious as they were. The most important components were shown as assemblies with the catalog number only. The wiring was questionable. It was unclear how separate schematics were interconnected; and there were locations where the actual machine and schematics did not match.

For example, output circuitry was totally different from block to block. At first Kihara and his staff could not make heads or tails of this. Eventually though, they realized that more than one engineer had taken part in the project, each designing a given block to his own liking. Typically American, perhaps, but Kihara and his associates were not in a position to appreciate it at the time. Kihara's group would never have unraveled this maze if they had not designed their own audio tape recorder earlier.

Shortly afterwards, Sony became the first Japanese company to produce a VTR. While it was capable of recording and reproducing television signals, its picture quality, noise and stability were still far from satisfactory.

Just as Kihara and his staff were working on the prototype of Japan's first VTR, a leading weekly magazine, Shukan Asahi, published an article on Japanese industry by critic Soichi Ohya which called Sony "a corporate guinea pig."

" Toshiba has now outpaced Sony in the field of transistors, with close to 2.5 times greater output than the former leader. Toshiba's strength is certainly drawn from its corporate strategy of investing whatever capital is necessary to profit on the products it sees as lucrative. Sony, the pioneer in transistor production, has played the guinea pig for Toshiba admirably."

The term "guinea pig" refers to being made sacrificial ? sticking one's neck out by taking the lead in research and development. Once the work tested by the "guinea pig" is deemed feasible, large corporations jump on it and make it their own. To Ibuka and the others, it was not a kind description.

Indeed, Toshiba's production was high. They had invested some 1.3 billion yen into mass production transistor plants. Sony, on the other hand, was capitalized at 190,000 yen after the war and had built up its holdings to 200 million yen in the short space of twelve years. But Sony could not compare financially with the larger corporations like Toshiba and others with their longer histories.

Perhaps the epithet "corporate guinea pig" was apt. It was, however, their technical superiority, team-like solidarity and the capacity to set things in motion that enabled Sony to continually create new products in the rapidly advancing electronics industry. Without considering these elements, any comparisons with the well-established companies just would not be fair.

Initially Ibuka greatly resented the metaphor. In later years, though, he seemed to revel in it. "One of our most important jobs is determining how to apply the latest developments in electronics to new consumer products. Naturally, then, we have to keep up with change. Today, those who simply do the same work over and over in the same way will gradually fall behind the times. One has to be innovative. There are countless industries which can be built up from scratch if someone takes the right approach. In other words, by taking this guinea pig approach to products, there is always something new to challenge.

" Take the transistor for example. When American and European developers scoffed at the idea of using them in radios for home use, Sony developed transistor radios into a marketable consumer product and led Japanese industry in production. This was one of the major factors enabling the Japanese radio industry to lead the world market. This is the crowning glory for us guinea pigs who continually strive to develop new consumer products."

Ibuka continues, "Today, there are still plenty of uses for transistors in consumer products. If we are considered guinea pigs for developing all the possible products incorporating the transistor, then there's nothing wrong with being a guinea pig." Ibuka and the Sony management saw no harm in being called guinea pigs if their products contributed to the development of the electronics industry and benefited the consumer.

The guinea pig article reflected Sony's growing prominence in Japan. Indeed, just around this time, Sony was about to break out of the ranks of the small- and medium-sized corporations and join the ranks of large corporations.

On August 8, 1955, Totsuko's stock was listed on the over-the-counter market of the Tokyo Stock Exchange. That day's Nihon Keizai Shimbun noted, "Totsuko stock, listed on the OTC market, showed modest appreciation in January and February. As of next spring, production of transistors is expected to increase to 50,000 from the current 5,000, and monthly sales are expected to increase accordingly from 50 to 150 million yen.

In December of 1958, Sony was listed in the first section of the Tokyo Stock Exchange. Both its past performance and future prospects were regarded as excellent.